You Know Those New Chips In Your Credit Card? They’re Failing You Miserably
By Carey Wedler
ActivistPost.com
AUGUST 6, 2016
Americans have spent much of 2016 lamenting the addition of chips into their credit and debit cards. In exchange for the extra few moments consumers spend checking out, however, they are promised enhanced security to protect their accounts.
But a new discovery unveiled Wednesday by professional hackers at the Black Hat USA summit in Las Vegas called into question the supposed ironclad security of the new chips, which are referred to as EMV technology.
Retailers and banks began replacing regular magnetic stripe card readers with EMV last October after credit card companies like Visa and Mastercard threatened to hold them responsible for false charges made on cards during magnetic strip transactions. The mandate came amid high-profile breaches of retailers like Home Depot and Target.
In spite of industry assurances that EMV guarantees more security, computer security experts at the payment technology company, NCR, unveiled a basic, albeit glaring, security flaw.
According to CNNMoney, which first reported the discovery, when a consumer swipes the magnetic stripe of a card with a chip in it, the magnetic reader is programmed to alert the payment machine. The machine then prompts the consumer to insert their card into the chip reader, instead. But according to NCR, hackers can rewrite the code of the magnetic stripe so the card appears to be chipless.
As CNNMoney noted, “This allows them to keep counterfeiting — just like they did before the nationwide switch to chip cards.”
The reason for this security hole, according to the experts, is that retailers are not encrypting their transactions. “There’s a common misperception EMV solves everything. It doesn’t,” said Patrick Watson, one of NCR’s researchers.
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